Payment Plan Default in Ontario Small Claims Court: How to Resume Enforcement

When the Debtor Gets a Payment Plan

Ontario Small Claims Court judges sometimes order the debtor to pay in instalments rather than a lump sum. The debtor might also propose payment terms under Rule 9.03. While a periodic-payment order is in force, enforcement is paused except that a land writ may still be issued and filed with the sheriff.

This sounds reasonable until the debtor stops paying. Maybe they make three payments and then go silent. Maybe they miss the first one entirely. The question is: what happens next?

How to Resume Enforcement After a Missed Payment

For a periodic-payment order under Rule 20.02, serve the debtor with a Notice of Default of Payment (Form 20L) and file a copy with an Affidavit of Default of Payment (Form 20M). The order terminates 15 days after service unless the creditor files a consent (Form 13B) waiving the default. After it terminates, enforcement may resume.

For a payment proposal under Rule 9.03, the creditor has 20 days after service of the defence to dispute the proposal using Form 9B. If it is not disputed, the terms operate as a court order. After a default, serve Form 20L; once 15 days have passed, file Form 20M. The clerk may then sign judgment for the unpaid balance. Rule 20.04 concerns a Certificate of Judgment (Form 20A), not automatic acceleration.

Filing the Notice of Default of Payment

To resume enforcement after a default under a Rule 20.02 periodic-payment order:

1. Confirm the default. Check your records — did the payment actually come in? Court payments sometimes arrive late through the clerk's office. Make sure the payment is genuinely missed, not just delayed.

2. File the default documents and Form 20P (Affidavit for Enforcement Request) with an updated interest calculation. Your total-owing figure now includes: the original judgment amount, minus payments received (allocated properly to costs, interest, then principal), plus post-judgment interest accrued on the remaining balance.

3. Request your enforcement document — a Notice of Garnishment (Form 20E), Writ of Seizure and Sale (Form 20C or 20D), or Notice of Examination (Form 20H).

Once the order has terminated, request an enforcement document using Form 20P. There's no separate "default application" fee beyond the standard enforcement filing fee ($144 for garnishment, $68 for writs or examinations).

Rule 9.03 Payment Proposals

A payment proposal under Rule 9.03 works differently from a court-ordered instalment plan. Here, the debtor proposes terms — so much per month for so many months. As the creditor, you can:

• Dispute the proposal — file Form 9B within 20 days after service of the defence to request a terms-of-payment hearing
• Let the deadline pass — if you do not dispute it within 20 days, the terms operate as a court order
• Address a default — serve Form 20L; after 15 days, file Form 20M so the clerk may sign judgment for the unpaid balance

The risk of allowing a low payment proposal to go undisputed: if the debtor pays $50 a month on a $12,000 judgment, you're looking at 20 years of payments (ignoring interest). Meanwhile, post-judgment interest keeps accruing at 4.0% per annum, and a default requires the notice-and-judgment process described above before you resume enforcement.

If the proposal seems unreasonably low relative to the debtor's income, consider rejecting it and requesting a hearing where the judge can set a higher amount based on the debtor's actual financial capacity.

Restarting After a Long Gap

If the debtor paid for a while, stopped, and months have passed, you'll need to update your figures before filing. The interest calculation on Form 20P must reflect:

• Payments received (with dates and allocation to costs, interest, then principal)
• Quarterly interest rate changes during the payment period
• The correct remaining principal after partial payments were properly applied

This is where a running ledger pays for itself. Without one, reconstructing the accurate balance months after payments stopped — with partial allocations across quarterly rate changes — is tedious and error-prone.

Preventing Payment Plan Problems

If the court orders or you accept an instalment plan, keep a written log of every payment received. Note the date, amount, and how it was allocated. If the debtor pays by cash or in person at the court, get a receipt.

Also keep the debtor's contact information and employment details current. If they default and you need to garnish, you'll need the employer's name and address — information that may have changed since the examination hearing.

For a payment tracking worksheet and the step-by-step default-to-enforcement process, see our Ontario judgment enforcement guide.

See more Ontario guides →